U.S. Home Prices Post Slowest Annual Growth in Almost Two Years

Erratic Fed monetary policy manipulations is resulting in a roller coaster performance in the economy.

Please explain to me again how the Fed brings "stability" to the economy.

Clueless Santorum Tries to Copy Ron Paul

Rick Santorum is out with a new economic plan that includes a call for:

[An]  audit of the Federal Reserve and return to it’s original purpose – a single charter to only manage inflation.

Sound familiar? He is trying to grab from Ron Paul's playbook by calling for an audit of the Fed, but has no clue that the original purpose of the Fed was just as bad as what the modern day Fed has morphed into. It makes no sense to return to the original purpose of the Fed The Fed was founded to create inflation. As Murray Rothbard wrote in The Mystery of Banking:

The new Federal Reserve System was deliberately designed as  an engine of inflation, the inflation to be controlled and kept uniform by the central bank.

This management of inflation causes the boom-bust cycles that we see in the economy. Rothbard again:

[New York Fed Governor Benjamin] Strong pursued an inflationary policy throughout his reign, first during World War 1, and then in spurts of expansion of the bank reserves in the early 1920s, 1924 and 1927...With the Federal Reserve System established and in place after 1913, the remainder of the road to the present may be quickly sketched.....Fed inflation led to the boom of the 1920s and the bust of 1929...

This is what Santorum wants to return to?

Ron Paul is calling for an audit, because the Fed has been up to even more mischief since its founding, but this in no way means that he wants to bring the Fed back to simply its original purpose of inflating the money supply and causing the boom-bust cycle.

Santorum's call for a return to just the original purpose of the Fed shows just how clueless he is about the subject.

He is basically saying, "Let's return the Fed to the days when it created the boom-bust cycle that ended up creating the Great Depression."

Scary.

US Homebuilders See Surge in Potential Buyers

How's Paul "We are under depression conditions right now" Krugman going to handle this?

From CNBC:

Not since the spring of 2008 have the nation’s homebuilders felt this good about the potential for new business. An industry association survey measuring builder sentiment rose for the third straight month in December, with significant gains in the component measuring traffic of perspective buyers...

“This is the first time that builder confidence has improved for three consecutive months since mid-2009, which signifies a legitimate though slowly emerging upward trend,” said National Association of Home Builders Chief Economist David Crowe. “While large inventories of foreclosed properties continue to plague the most distressed markets and consumer worries about job security and the challenges of selling an existing home remain significant factors, builders are reporting more inquiries and more interest among potential buyers than they have seen in previous months

.

Right on time, just as the Austrian Business Cycle model suggests. Fed accelerated money printing is boosting, in manipulated fashion, the capital goods sector, which includes the housing markets. The question now is, When will Krugman state that he hear's the howl of Keynesian animal spirits and declare that the bust phase of this business cycle is over?